Virtual Galaxy Infotech, a prominent SaaS product-focused company, is gearing up for its Initial Public Offering (IPO) in May 2025. The company specializes in providing core banking software solutions, IT solutions, ERP implementation, and customized software for industries like BFSI, ERP, and E-Governance. They offer complete post-implementation support, monitoring, and maintenance services, which are crucial for businesses in these sectors. Virtual Galaxy Infotech’s growth is powered by an experienced management team, and they are now looking to expand further through this IPO.

Key Details of the Virtual Galaxy Infotech IPO

IPO Size and Structure
Virtual Galaxy Infotech’s IPO will raise ₹ 93.29 crores, entirely through a fresh issue of 65.7 lakh shares. The price band for the shares is set between ₹ 135 and ₹ 142 per equity share. The subscription period opens on May 9, 2025, and closes on May 14, 2025. Investors will have a chance to apply for the shares starting at a minimum investment of ₹ 1,42,000 (1,000 shares) for retail investors and ₹ 2,84,000 (2,000 shares) for High-Net-Worth Individuals (HNIs).

Subscription Status and Listing Timeline
As of May 13, 2025, Virtual Galaxy Infotech's IPO has been subscribed 9.21 times, reflecting strong investor interest. The allotment process will be finalized by May 15, 2025, and the shares are expected to list on the NSE SME segment on May 19, 2025.

Financial Performance and Metrics

Revenue and Profitability
Virtual Galaxy Infotech has shown strong growth in its financial performance over the past few years. For the fiscal year ending December 31, 2024, the company reported revenues of ₹ 10,137.06 lakh, with a significant increase from ₹ 6,357.66 lakh in 2023. The EBITDA for the same period was ₹ 4,562.80 lakh, reflecting the company's operational efficiency.

The company's Profit After Tax (PAT) for the fiscal year 2024 stood at ₹ 2,741.51 lakh, marking a significant rise from ₹ 1,653.95 lakh in 2023. This indicates a steady growth trend, showcasing Virtual Galaxy Infotech’s strong profitability position.

Key Financial Ratios
Virtual Galaxy Infotech's pre-issue Earnings Per Share (EPS) for FY24 is ₹ 10.06, while the post-issue EPS is expected to be ₹ 6.65. The pre-issue Price to Earnings (P/E) ratio stands at 14.17x, while the post-issue ratio is 21.35x. These metrics suggest that the IPO is fairly priced when compared to the industry P/E ratio of 142x.

Additionally, the company boasts impressive Return on Capital Employed (ROCE) of 31.68% and Return on Equity (ROE) of 53.52% for FY24. These performance indicators make the company an attractive investment opportunity for growth-seeking investors.

Utilization of IPO Proceeds

The funds raised from this IPO will be used for several strategic objectives:

1. Capital expenditure for setting up an additional development facility in Nagpur, Maharashtra (₹ 34.26 crores).

2. Repayment of borrowings (₹ 3 crores).

3. Procurement of GPU, servers, and storage systems for their data center (₹ 5.05 crores).

4. Business development and marketing activities (₹ 14.06 crores).

5. General corporate purposes, ensuring that the company is well-positioned to continue its expansion.

Grey Market Premium and Listing Expectations

The Grey Market Premium (GMP) for the Virtual Galaxy Infotech IPO is currently ₹ 21, indicating a potential listing gain of 14.78%. This figure shows that market expectations are positive, and the company is likely to see an encouraging debut on the exchange. However, it is essential to note that the GMP is based on unofficial trading, and actual gains will be determined once the shares are listed.

Anchor Investors and Allotment Process

Virtual Galaxy Infotech has raised ₹ 26.12 crores from anchor investors, who have secured 18.4 lakh shares at the upper price band of ₹ 142. The IPO allotment date is set for May 15, 2025, and investors can check their allotment status on the registrar’s website.

Investment Outlook

Given the company's robust financial performance, solid management team, and the IPO’s valuation metrics, we recommend Risky Investors to consider applying for the Virtual Galaxy Infotech IPO for listing gains. While there is some risk associated with any IPO, the potential for growth and attractive listing gains makes this an appealing opportunity for investors.

Conclusion:
Virtual Galaxy Infotech’s IPO is an exciting investment opportunity, particularly for investors looking for growth in the SaaS and IT solution space. With its strong financials, solid growth trajectory, and a promising valuation, the IPO is expected to attract significant interest. Investors are advised to stay updated on the subscription status and allotment process to capitalize on potential gains once the shares are listed on the NSE SME.

The Upcoming IPOs in this week and coming weeks are Integrity Belrise Industries, Accretion Pharmaceuticals, Wagons Learning.

The Current active IPO are Integrity Infrabuild Developers, Virtual Galaxy Infotech.

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